Weintraub: California's slow-cooking recovery

Jan. 12, 2014

Updated Jan. 13, 2014 7:35 a.m.

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United Service Workers West Janitor demonstrate outside of Walt Disney Studios to protest the layoffs of more than 70 janitors, in this 2012 file photo. Since then, services like janitorial have helped lead California's economic recovery. NICK UT, AP

United Service Workers West Janitor demonstrate outside of Walt Disney Studios to protest the layoffs of more than 70 janitors, in this 2012 file photo. Since then, services like janitorial have helped lead California's economic recovery. NICK UT, AP

Why it matters

California was the state hardest hit by the recession and it was slow to begin to recover. But lately the state has been leading the nation in job growth, and those jobs are starting to come from all sectors of the economy and most parts of the state.

California's economy might not be roaring, but the state is definitely enjoying a broad-based recovery that's spreading growth and jobs from north to south and west to east in a way that looks more sustainable every day.

California was among the states hardest hit by the recession that began with the bursting of the housing bubble. Having ridden that boom higher than most parts of the country, California crashed harder than just about any other state. We lost nearly a million jobs and unemployment soared to 12.4 percent.

But amid that economic crisis, few noticed that the biggest job losses were concentrated in occupations linked to the ever-cyclical housing industry: construction, finance, and retail sales. The foundation of the economy – technology, trade, professional services, tourism – took a hit but not nearly as big.

And since we hit bottom, slowly but surely the state has been coming back.

The latest employment numbers showed the state adding another 44,300 jobs in November, more than one out of every five jobs added in the entire country that month. The unemployment rate fell to 8.5 percent.

The greatest job growth came in the trade, transportation and utilities sector, which added 32,500 positions, while construction, manufacturing and information were also big gainers. Construction alone has added 31,500 jobs in the past year, an increase of more than 5 percent.

But the biggest news in recent months might be the geographic reach of the recovery. The recession hit hardest in Southern California, especially the inland areas, and in the Central Valley, and those places were the slowest to begin to recover. The Silicon Valley for a while was really the state's only bright spot. But lately the other regions have been coming on strong.

Nearly half of the state's job gains in November were in Los Angeles County, and Los Angeles, Orange, Riverside, San Bernardino and Ventura accounted for more than half of the increase in the past two months. In the Central Valley, Fresno, Kern, San Joaquin, Stanislaus and Sacramento saw gains in November that were at or above the statewide average.

That growth should begin to feed on itself, with more jobs meaning more income and more spending, fueling still more growth. That's how an economy comes out of a recession, and that is what appears to be happening now, albeit at a much slower pace than is typical in a recovery.

And while big tech companies like Apple, Google and Facebook have been hiring a lot of people, one recent survey said that many of the state's fastest growing companies are in the services sector.

The state's biggest job creator in the past year, according to the report by Inc. Magazine, was Santa Ana-based United Services of America, which provides security and janitorial services to other firms. The company added more than 14,000 jobs (nationwide) in an example not just of economic growth but also the trend of big companies contracting out for services they used to provide with their own staffs.

Pacific Dental Services of Irvine added more than 850 jobs. The company performs administrative and personnel services for more than 300 dentist offices in states from California to Texas.

Irvine's New American Funding added nearly 450 jobs last year as the comeback in the housing industry increased demand for the firm's financial services.

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